Oct 11 – On October 10, a Delhi court granted the Enforcement Directorate (ED) a 3-day custody of four executives, including Hari Om Rai, the Founder of Lava International, who are accused in the Vivo Mobiles India case. The ED had requested the custody, citing their uncooperative behavior during questioning.
The ED had previously arrested these four executives, including a Chinese national, as part of an ongoing investigation into alleged money laundering activities. These arrests followed raids conducted on October 9.
In its plea to the court for remand of Hari Om Rai, the ED disclosed crucial information about his alleged role in facilitating Vivo India’s operations in the country. According to the ED, Hari Om Rai played a key role in creating a network of companies that circumvented Foreign Direct Investment (FDI) regulations, aiding Vivo India in establishing a significant presence in India.
The ED claimed that Hari Om Rai and Lava India provided an initial funding of 3.17 crore for the establishment of official and residential accommodations for Chinese nationals working for Vivo India. However, there was no formal agreement or collateral exchanged between Vivo India and Lava India for the transfer of these funds. The probe agency argued that this transaction was not genuine, suggesting their involvement in assisting Vivo and its Chinese owner, BBK, in building a substantial presence in India.
These actions followed a series of raids conducted across India in the previous year, encompassing 48 locations, including the premises of Vivo Mobiles India and 23 affiliated companies, such as Grand Prospect International Communications (GPICPL).
It is worth noting that Lava is one of the 16 beneficiaries of the government’s production-linked incentive (PLI) scheme.
The ED’s investigation under the Prevention of Money Laundering Act (PMLA) began on February 3, 2022, following an FIR filed by the Delhi Police. The FIR was based on a complaint filed by the Ministry of Corporate Affairs, accusing GPICPL of fraud, cheating, and criminal conspiracy.
The ED alleges that several companies were established in India with the primary intention of unlawfully transferring funds to China. Additionally, the investigation uncovered that Vivo Mobiles India had transferred a substantial portion, roughly half of its sales proceeds totaling Rs. 1.25 lakh crore, to China, purportedly to evade taxes in India.